A pickup group, or pug, is a group of random players that are grouped together via the matchmaking system, usually to do an instance or quest.

Note that the word "group" refers to the literal meaning of a group, i.e. players having a common objective, and is not limited to five persons (a party). Raids with pick-up players are still called PuG, despite being a raid.

Pickup groups are usually less organized than a group formed from people of the same guild or guild alliance because the players are less familiar with each other. Pickup groups are usually more susceptible to loot ninjas or incompetent players because forming a group this way involves much less preparation, and the members are relatively anonymous compared to people recognisable from a guild.
Guilds may refuse to use pickup groups for instances due to the chance that one or more of the players will wipe the group, ninja loot, or just generally be insubordinate. These experiences usually result from a very small but horrible group of players, or players who aren't very experienced (it's quite possible to go all the way to the maximum level of 90 without ever entering an instance).

However, many pugs are very successful, especially at higher levels when all the members are familiar at least with the group dynamic even if they're not familiar with the instance or area. Successful pugs are effective at picking up innovations that other players have developed, and developing your own innovations that improve your overall abilities as a member of your class and as a leader of future runs.

The most important elements of a successful pug are positive attitude, cooperation, clarity (including marks for each crowd control spell), and experience that the leader has. While all but the most dysfunctional pugs can get through a 3-player group quest that requires killing a single weak elite mob, running instances still requires some sophistication from everyone in the group.

Speak to someone first BEFORE inviting them to a party. It is very rude to blatantly invite someone to join your group without first asking. Always practice good etiquette if you want to be invited into future instances.

Know the basic loot etiquette and don't be a loot ninja. Loot ninjas get a very bad reputation very fast. Many players have multiple characters and are either in guilds or talk to others about bad experiences. Being labeled a loot ninja will most likely result in not being able to join any groups or guilds in the future. In general, feel free to roll greed on any green items. Rolling need on a green items is also fine if your character can make a good use of it (this does NOT mean disenchanting or selling it on AH unless agreed otherwise). Abusing the need button is a #1 sign of a loot ninja. When blue items come up, similar rules apply, but it's better to put off rolling until combat stops and discuss it with the rest of the group.

Certain items, like mount drops for example, should be needed on by EVERY member who wants it. This will prevent ninja looters from waiting till everyone has greeded followed by them rolling need. If you do not want the item, pass or greed it.

Know your class, your talent spec, your expected role in the group, and your own limitations. Don't over-step your bounds unless asked to do so. This means allowing the tank to pull and obtain aggro before everyone else attacks. Inexperienced hunters, mages, warlocks, and shaman commonly cause party wipes because of failure to let the tank do their job.

If you are a tank, hold aggro. Mods like Omen are rarely used outside of raids. Unless there is a huge gear difference, you should have no problem holding threat on a single target. If your group members are pulling aggro in multi-target fights, calmly remind them to focus on the DPS target (people usually recognize the skull). If anyone else pulls aggro, either they outgear you by a large margin and you should tell them to go easy on DPS, or you have not read all the tanking resources available to you.

Be prepared. If you use mana, have a full stack (or two) of waters before considering entering an instance. Nobody wants to hear "anyone have water?" just 5 minutes into the dungeon. Don't count on a mage being in the group in a PUG. If you are tanking, have a full stack of food (especially stat buffing food) so that the healer isn't using up after-combat mana to heal you. Hunters should have enough pet food to keep their pets happy. All party members should have bandages and appropriate potions and scrolls for their class. The last but not the least, repair your equipment before you start. A wipe is bad, but it's far worse when someone has to take a 10-15 minute pit stop to go back for repairs. For higher levels, engineers with Field Repair Bot 110G or version 74A may come in very handy.

Do some planning before going into the instance. If someone ran the dungeon before and someone didn't, the person who ran before should lead the party. Work out who is healing, off-healing, tanking, off-tanking, dps-ing, cc-ing, and the battle icon markers that will be used. Just five minutes of pre-instance talking among the group can save many headaches in the long run.

If you are new and uncertain, ask. Everyone was a newbie at one time or another. If you are uncertain as to your job or how to perform it, ask the group.

Don't be a superstar. PUGs are about the individual people in them having a good time. If they want advice, they'll ask for it. If they want a run through they'll ask for that too. If they want your criticism they'll ask for it. If they don't ask, it's a good bet that they don't want it. Very few people go into PUGs because they think you are a superstar. However, it's to ok to GENTLY educate other players in case of gross errors (e.g. using Howl of Terror, persistently attacking crowd controlled mobs prematurely, or setting one's pet on aggressive setting).

Be helpful. If someone is new, answer their questions without being condescending. You may make a new friend and teach someone how to be a better player.

Be tolerant of different approaches. Some people crave strict order. Others thrive on chaos. Most instances can be handled by groups that are slow and methodical or by groups that are chaotic. Nothing sours a group more than people complaining about the approach. The group's consensus rules. Let your preference be known, but don't think that everyone has to do it your way. If the consensus doesn't fit with you, it may be time to leave and get another group.